Investing in Student Property – What are the Most Profitable Cities in the UK?

Looking to invest in student property? Find out where the hotspots for property investments are.

In a previous blog, we’ve written about the benefits of investing in student property in the UK.

It is that some areas are more suitable for investment than others but there are certain hotspots across the country where student property is a more popular investment.

This is due to several reasons. One is the growing trend of parents buying properties1 in university towns, and then renting them out to their kids and other students.

Another is that, despite the increase in tuition fees, the number of new students in the UK is rising2 every year. Higher demand means higher supply is needed.

Nevertheless, as mentioned this applies more in some regions than others. Here are the top five cities for investing in student property.*

*Please note these figures have been taken from StudentPodShop.com, which has sourced data from Zoopla.

Birmingham, West Midlands

Birmingham Canals

Birmingham benefits from a good central location, which provides excellent transport links to other major cities in the UK, and the fact that it has five universities – therefore plenty of students.

The exact number of students is difficult to keep track of, as the number is growing so quickly. However, it was estimated to be at 65,0003 in 2015.

As such, a number of new accommodation facilities have been built over the last few years4.

According to Zoopla (via StudentPodShop.com), property prices have risen by 15 percent in the last two years. And the average yield for investors stands at around 7%.

Nottingham, East Midlands

Nottingham, England - August 30, 2016: Frontage of the Theatre Royal. In Nottingham, England. On 30th August 2016.

One of the benefits of investing in student property in Nottingham right now is that prices are relatively low – a two bedroom flat could set you back just £112,000.

Zoopla figures show an average yield for investors of 6.4 percent.

London

London at night with urban architectures and Tower Bridge

The nation’s capital is continuously seen as a stable property investment for the investors that are willing and can afford to invest. The reason why is because the country has a number of universities and colleges that are attended by over 300,00 students6, many of whom come from overseas and are considered fairly wealthy.

Of course, wealth is almost a prerequisite for any London student, as average rent prices for accommodation hovers around £226 per week in the capital7. That’s over £90 more than the UK average. Since 2012-13, London has recorded a higher rate of year-on-year rental increases than anywhere else in the UK.

According to the Zoopla data, the average yield for property investment in London is 6.4 percent.

Glasgow

The Clyde Arc in Glasgow, also known as The Squinty Bridge. Photographed with slow shutter speed and night.

The only representative of Scotland on the list, and it isn’t the capital. Glasgow represents a good investment opportunity because of its low housing prices. You could buy a two-bedroom flat here for just £108,000.

It also benefits from the fact that many students choose to remain in the area after completing their studies, meaning the demand for housing rises more quickly than other areas.

Approximately 45,000 students are current living in Glasgow8.

As with Nottingham and London, the average yield for student property investment in Glasgow is 6.4 percent.

Coventry

Vintage looking Coventry Cathedral, England, UK

Over 35,000 students are currently attending one of the two main universities in Coventry (Coventry University and City College Coventry). The area also benefits from hosting campuses for The University of Warwick.

As with Glasgow and Nottingham, low housing prices mean that this is a more accessible property investment opportunity. Unlike London, which requires significant capital. Once again, the average yield for property investment in Coventry is 6.4 percent.

While any one of these cities represents a good opportunity for investors, it should be made clear than the average yield offers no guarantees. Some investors do not see any return, such is the risk of property investment. Always speak to an independent financial advisor before making any decision.

Links

http://www.telegraph.co.uk/finance/property/11845162/Mapped-top-class-university-towns-for-buy-to-let-property.html

https://www.ucas.com/corporate/news-and-key-documents/news/university-and-college-applicant-numbers-rise-02-ucas-reports

http://www.thecompleteuniversityguide.co.uk/cities/birmingham/

http://www.bcu.ac.uk/news-events/news/work-begins-on-new-city-centre-accommodation-for-our-students

https://nottinghaminsight.org.uk/insight/partnerships/voluntary/population.aspx

http://www.thecompleteuniversityguide.co.uk/cities/london/

https://nusdigital.s3-eu-west-1.amazonaws.com/document/documents/20637/e1416d1aae50226cf42ab902273d89c4/Unipol_NUS_AccommodationCostsSurvey2015.pdf?AWSAccessKeyId=AKIAJKEA56ZWKFU6MHNQ&Expires=1481646743&Signature=kiTLMUl4fFjNU42HFZ%2FJRFIV9fw%3D

http://www.thecompleteuniversityguide.co.uk/cities/glasgow/

Always seek independent advice. This blog has not been approved as a financial promotion by Cogress Limited. We are not responsible for the content of external websites. Potential investors must rely on their own due diligence prior to investing.

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